Cat celebrates 100 years of global trade

Tuesday

Nov 24, 2009 at 12:01 AMNov 24, 2009 at 11:26 AM

It was 100 years ago - Nov. 24, 1909 - that the first Caterpillar machine crawled outside the United States. The company's first export was to a sugar plantation in Mexico, a rather auspicious beginning to the part of the business that today has Caterpillar one of the top global manufacturers and exporters in the world.

Paul Gordon

If not for the vision of Caterpillar Inc.'s forefathers, the company could well be only a small shell of itself today, Chairman Jim Owens said Monday.

Instead, the company's early leadership at Holt Manufacturing Co. - which merged with C.L. Best Tractor Co. to form Caterpillar in 1925 - saw the need to be players on the global stage if real growth was going to happen.

"We have to give our forefathers credit for their vision," Owens said in an exclusive interview with the Peoria Journal Star. "They understood we needed to be global players for the kind of equipment we make, and it has become a heritage of our company to be exporters."

It was 100 years ago - Nov. 24, 1909 - that the first Caterpillar machine crawled outside the United States.

The company's first export was to a sugar plantation in Mexico, a rather auspicious beginning to the part of the business that today has Caterpillar one of the top global manufacturers and exporters in the world.

The first export was a Holt Caterpillar Model B, manufactured by the Northern Holt Co. of Minneapolis. It was sold to the Tabasco Plantation Co. in Mexico. The machine cost $3,300 and was shipped to Mexico by train.

Owens, who has long been an advocate of free trade, said Caterpillar needs more free trade agreements to maintain that lofty position, as do other exporters in the United States.

"We need to be able to continue to strike a reasonable balance. We have to maintain our competitive advantage going forward," he said.

Owens said 78 percent of the track-type tractors Caterpillar built in the United States in 2008 - mostly in East Peoria - were exported. A turnaround in the company's financial in 2010 "is going to have to revolve around the emerging markets" and industries such as oil and gas exploration that are in need of Caterpillar equipment.

Noting Caterpillar has benefited from trade agreements in the past that allowed it to export duty free and thus be more competitive, Owens said it now needs the Obama administration to forward to Congress agreements pending with Panama, Colombia and South Korea.

"A lot of the heavy lifting has already been done (with those countries), and agreements would be very much in the best interests of our country," he said.

He said the duty on a Caterpillar machine can run as high as $200,000, making that equipment less attractive and thus less competitive in an emerging market without a free trade agreement with the United States.

Such as agreement, Owens added, "can have a very powerful impact on U.S. jobs."

Caterpillar's export business actually predates the company, at least under that name.

Holt Northern was a subsidiary of California-based Holt Manufacturing Co. That company later merged with the C. L. Best Tractor Co., changed its name to Caterpillar and moved its headquarters to East Peoria. Caterpillar spokesman Jim Dugan said the company name was made Caterpillar because that's what Benjamin Holt, founder of Holt Manufacturing, called his machines and he liked the name.

The machine that was exported, machine No. 102, was a Holt Caterpillar Model B with a 45-horsepower gasoline engine.

Caterpillar reacquired No. 102 in 1932, and the machine was stored at a Caterpillar facility in California until it was sold to a collector in 1968. The machine was restored and is on display today at the Heidrick Ag History Center in Woodland, Calif., Dugan said.

"It still runs, but is no longer working in the fields," he said.

Paul Gordon can be reached at (309) 686-3288 or pgordon@pjstar.com.

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